Notes

Speculation: This is a somewhat curious item, as there was no need to introduce another soul item which is worth this little when consumed. Furthermore it doesn't have a 'Large' version either, like all the other normal souls have. Could it perhaps have another unknown use?

Speculation: It is very likely that this item is used by the developers as bait. Just like any other item that can be picked up, Fading Souls appear as blue shiny objects. You, the player, would have no idea what these are or what they're worth until you actually pick them up. Upon spotting a blue object, a lot of players would rather gamble and try to pick up the risky item at their peril, rather than ignoring it and never knowing what it's worth. This makes Fading Souls useful for the level designers; they can place one or more of them near a trap, an ambush, or in a hazardous environment (like the poison gas pits in Harvest Valley and the Executioner's Chariot's encounter).

I also think they play into the lore and environment a bit too. As a player we get souls when killing things. These faded souls are the souls of things that died but were never collected, or something drained them to the point there was practically nothing left of them, or as a jab at the player, this is a spot where only weaklings died.